Fazarincs make a gift that gives them income

Thursday, October 15, 2015

When Zvonko and Draga Fazarinc decided to move into a retirement community in Palo Alto, they wanted additional income to help with this transition and a tax deduction to reduce their income-tax liability. That created a perfect opportunity for the couple, originally from Slovenia, to create a “gift that gives back” with the Lucile Packard Foundation for Children’s Health—providing them tax benefits and income for life while offering thanks for Zvonko’s 32-year career at the Hewlett-Packard Company.

Zvonko, who has a Ph.D. from Stanford University, spent his entire career at Hewlett-Packard as an engineer and manager. The gift will provide an endowment for the general support of Lucile Packard Children’s Hospital Stanford and is in the form of a charitable remainder trust. The principal remaining in the trust will pass to the hospital.

Zvonko and Draga came to the U.S. from Slovenia in 1960. Zvonko had been admitted to Stanford’s graduate division of electrical engineering and given a small research assistantship. He realized that his research would take more than a year, so he brought his family to California—his wife Draga and their two children, Darko and Bojana.

After Stanford, Zvonko joined Hewlett-Packard as a research and development engineer. He earned promotions as a project manager, department manager, and laboratory director. He retired but was invited back to work as a senior science advisor to the research and development vice president of the company. He also served at Stanford as a consulting professor of electrical engineering.

They funded their charitable remainder unitrust with Hewlett-Packard stock, which he had acquired over many years, and were able to use the charitable deduction from the trust to help offset the taxes on the extra funds they needed to draw from retirement savings. They did not have to pay capital-gain tax on the tremendous appreciation they had in their Hewlett-Packard stock. The trust also provides them income for life, with the payments adjusted annually based on the value of the trust.

The gift will expand the hospital’s capacity to provide groundbreaking care for its youngest and most vulnerable patients. Said Zvonko and Draga of their gift: “We benefited tremendously from the American dream, and we wanted to give back.”

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